The transaction is in line with the buyer’s strategy to grow internationally, beyond its European core markets. It follows the company’s entry into Brazil in early 2012 through the purchase of a 10% stake in MPX Energia SA (PINK:MPXEY).

Under the arrangement, E.ON has agreed to transfer to Verbund its stakes in certain hydroelectric stations in Bavaria, which represent 351MW of attributable generating capacity. They include E.ON’s interest in Oesterreichisch-Bayerische Wasserkraft AG (OBK), Donaukraftwerk Jochenstein AG (DKJ), Grenzkraftwerke GmbH as well as Nussdorf, Ering-Frauenstein and Egglfing-Obernberg run-of-river hydroelectric stations on the Inn River in Bavaria, along with procurement rights from Zemm-Ziller Hydroelectric Group.

Following the deal, the German firm will still be a leading hydro operator with some 2,300MW of hydro capacity in Germany, and will have a total of 6,000MW of hydro capacity, it said. E.ON added that it would seek to have at least a 10% slice of the local generation market by 2020, together with the other owner of Enerjisa, Turkish financial and industrial conglomerate Sabanci Holding AS. During a conference call with journalists today, E.ON’s chief financial officer Marcus Schenck also pledged investments of between EUR150m and EUR200m a year in Turkey until 2015.

The deal, which is awaiting approvals by the European Commission, Germany’s and Turkey’s antitrust watchdogs and Turkey’s energy regulator EMRA, is seen to be completed in the first quarter of 2013.